Westpac, last major bank to move after OCR increase, lifts a floating mortgage rate 10 basis points, increases short-term deposit rates 25 basis points

Westpac, last major bank to move after OCR increase, lifts a floating mortgage rate 10 basis points, increases short-term deposit rates 25 basis points

Westpac, the last major bank to move after last week's Official Cash Rate increase, says it's increasing a floating home loan rate by just 10 basis points and lifting term deposit rates for all terms up to 90 days by 25 basis points.

Last Thursday the Reserve Bank increased the OCR by 25 basis points to 2.75% in what's expected to be the first of a series of hikes.

Westpac says that, after careful consideration, it'll "absorb" 15 basis points on its "Choices Floating" mortgage rate for borrowers with a deposit or equity of at least 20%. This  rate is increasing to 5.74% from 5.64%.  All the bank's other floating home loan rates are being increased by 25 basis points.

On the savings side, term deposit rates for terms up to 90 days will rise by 25 basis points, and interest rates on Westpac's Online Bonus Saver and Online Saver savings accounts are being increased by 20 basis points.

Ian Blair, Westpac's general manager for retail, said following the OCR rise and with more expected, there was a good opportunity for customers to ensure their loans were structured to suit their circumstances.

“We’d encourage our customers to come and talk to us to ensure they have the right mix of fixed and floating for their situation. Fixed can provide longer term certainty in an environment of rising rates while floating provides some flexibility. It’s opportune to look at tailoring mortgages to meet personal financial circumstances," said Blair.

For new customers the floating rate changes are effective from Friday, March 21, and from April 11 for existing customers. Increases to online savings account interest rates also kick in on April 11.

See all banks' carded, or advertised, home loan rates here.   

See all carded term deposit rates for one to nine months here.

And see savings account rates here.

Westpac's new floating rates compare with other banks as follows:

below 80% LVR Floating Revolving
5.99% 6.10%
ASB 6.00% 6.00%
 - Total Money 5.99% 6.19%
 - Standard & FlyBuys 6.19% 6.19%
Kiwibank 5.90% 5.90%
Westpac 5.74% 6.00%
Co-op Bank 5.95% 5.95%
HSBC 6.24% 6.24%
SBS / HBS 5.90% 5.90%
TSB 6.04% 6.04%

and ...

below 80% LVR 1 yr 18 mths 2 yrs 3 yrs 5 yrs
5.69% 5.85% 6.29% 6.65% 7.20%
ASB 5.69% 5.85% 6.29% 6.60% 7.20%
5.69% 5.85% 5.95% 6.29% 7.20%
Kiwibank 5.49%   5.99% 6.40% 6.90%
Westpac 5.49% 5.85% 5.95% 6.35% 7.20%
Co-op Bank 5.49% 5.85% 5.99% 6.35% 7.10%
HSBC 5.59%   5.79% 6.55% 7.20%
SBS / HBS 5.50% 5.75% 5.90% 6.20% 6.85%
TSB 5.40% 5.85% 5.99% 6.40% 7.20%


Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »

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Well done Westpac for the smallest floating rate rise.

...and increases its deposit rate by more than its lending rates, thus compressing its margins, the opposite to what the cynics stated. Truth is, the banks are still bloody competetive against each other and its never going to be a uniform move since the OCR is not the only determinate of bank funding costs.